The Fallacy of Planning

The Fallacy of Planning says we are terrible at planning how long something will take and how much it will cost. Restated another way, the planning fallacy is people’s tendency to underestimate what it will take to get something done. The phenomenon of the planning fallacy ought not be a big surprise to any CIO or project management professional given the attention it has received over the years. What may be a surprise though is the pervasiveness of the fallacy of planning in our organizations and the cumulative impact it has on IT and the CIO’s reputation for delivering results.

The fallacy of planning is just one of the many forms of cognitive bias that affect decision-making in every aspect of our personal and professional lives. Cognitive bias is when a persons’ judgment is affected by a lack of metal abilities or from the misapplication of one. Most often this is a decision-making shortcut resulting from insufficient information, social pressure, or personal motivations. Cognitive bias is a very powerful form of irrationality, where people act in opposition to what is expected under the rationale choice theory which requires consideration in every risk management plan.

Cognitive bias includes innumeracy which is a particular form of irrationality related to a person’s fundamental inability to conduct basic reasoning with numbers. It is a form of mathematic s illiteracy often manifesting itself when dealing with really large (and small) numbers, probabilities, estimating, and even basic arithmetic.

Jerry, you make some good points, however....
Is innumeracy really the root cause?
What about people being naturally optimistic?
Or how about deliberate optimism in order to justify a project (often as a result of businesses not admitting to the fully savings)?

The cultural factors affecting project failures in the US are
legendary. We Americans, and other cultures, do have an overly optimistic view
that works hand-in-hand with an inability to grasp large numbers or complex
problems with multiple variables. Some think it is more arrogance than optimism
originating from over inflated sense of self and one's ability to execute -
think id versus ego. Perhaps I am making it more complicated than it needs to
be.

I would also offer that there are many organizational cultures
where a safer status quo mindset dominates. Here optimism gives way to low risk
guarantees for fear of failure. In these organizations, the importance of accurately
assessing project risk, resource requirements and expected benefits are
critical so that people don't feel like they are sticking their necks out.

I used
to think I was very globally aware having run global IT operations for a
Fortune 50 for many years. Then I began blogging and sharing my posts
internationally in a couple of non-USA forums. That is when my education really
began to improve my awareness of how much of what we do is culturally based or
at least strongly influenced. Seems remedial but it is not necessarily
instinctive to consider things from a broader view.

Hi, Jerry, great posting to discuss one the common IT (and even businss overall) pitfalls, fallacy of planning, I think the diversity of team (both leadership team and team members) could help effectively avoid the cognitive bias you emphasize here, the expanded lens of collective wisdom would bring up the different expertise and perspective to do the planning, and planning is not just the hard math; on time & on budge, even crtical as the art: communication and effectiveness: are we building the things customers truely need? Any alternative way to do the things via innovation & optimization., etc. Beyond people, process, as you pointed out, using Agile/Scrum, instead of traditional waterfall, may also make the planning more dynamic and fluid., plus: other technologies such as collaborative planning platform would also make the planning a continuous journey, not one time documentation. thanks.

In
recent years I have shifted my thinking about managing projects and have found
the iterative methods to be far better at keeping everyone focused and offering
better controls on scope and performance.

What do you think of the waterfall model? I checked the Wiki on iterative method and you have to wade thru a lot of lingo and nonsense to find out it means steering a curvy course based on what you learned during the last dev cycle. Is that what it means to you, Jerry?

Recently a CIO from a major bank appeared on a conference panel discussion. The talk turned to IT complexity, and the moderator asked the panelists what hardware they supported in their data centers.
The bank CIO thought for a moment, leaned forward and then said slowly, “Everything that’s ever been invented.”
The remark got a laugh, but it also revealed a truth many CIOs can relate to. Years of technology proliferation have resulted in a legacy maintenance problem that handcuffs IT organizations and prevents them from contributing to the business at a time when flexible IT infrastructure has...